Article: Reducing Risk With a Global Code of Ethics
Ethics, honesty and integrity are certainly business-critical objectives. And when your company enters global markets, ethics adherence can become an even more complex issue as business opportunities grow. That’s why leading corporations view it as imperative to implement a global policy that ensures the highest level of business ethics at every level of interaction. Why? Because your reputation — and your ability to serve customers in global markets by protecting their reputations — depends on it.
World Courier’s decades of experience in global markets has shown us not only the importance of best business practices, but also how murky ethics issues can become for decentralized, multinational organizations. It’s why we’ve implemented our own global code of ethics in partnership with our parent company, AmerisourceBergen. It’s also why we’re sharing the four facts global shippers should focus on when it comes to ensuring integrity.
What Is a Bribe?
- Money or favour, given or promised, in order to influence the judgement or conduct of a person in a position of trust;
- Something that serves to induce or influence
This definition is important because it highlights the fact that there is no distinction in regulation between the offer and acceptance of a bribe. The act of offering a bribe constitutes a regulatory violation, regardless of whether the bribe is ultimately consummated. And bribes come in many forms; cash is not the only violation of anti- bribery regulations. Bribes can exist in the form of gifts, hospitality, entertainment, travel, support for a cause, employment, property, discounts, investments and more. In the United States, this idea is often referred to as “cash in kind.”
The United States Foreign Corrupt Practices Act (FCPA) was enacted by the U.S. Congress to address widespread bribery of foreign officials by U.S.-based corporations. The goal of the act was to prevent corrupt corporate practices while protecting the people and institutions that had unknowingly invested in those corrupt companies. There also was a desire to “level the playing field” for those companies that were trying to act with honesty and integrity, but were being shut out of business opportunities because of the corrupt actions of other companies.
In 1998, Congress amended FCPA to expand the reach of enforcement to foreign companies and nationals when they “cause,” directly or indirectly, a corrupt payment to be made in the United States. That means that the FCPA now covers activities that occur in the U.S. and its territories — regardless of a company’s or individual’s nationality. This amendment provided such broad reach for enforcement purposes that the likelihood of corrupt behavior falling under the U.S. FCPA provisions is very high.
While enforcement of the FCPA is the joint responsibility of the U.S. Security and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ), the country’s diplomacy and enforcement efforts have made it a major proponent for similar regulations to be enacted by its major trading partners. These global initiatives include regulations such as the UK Bribery Act (2010) and the significant increase in other countries that are updating their anti-corruption regulations — the BRIC nations and Australia, for example.
In the UK, the Bribery Act 2010 focuses solely on bribery — specifically, the Act outlines four offenses. The two general offenses cover a business’ offering, promising, as well as giving, requesting or agreeing to receive an advantage from a business partner. And the two additional offenses cover what the Act refers to as “a discrete offence of bribery of a foreign public official” and the newest offense, a commercial organization’s failure to prevent bribery. The Bribery Act’s reach extends to both UK companies operating abroad and overseas companies with a presence in the UK. That means a foreign business operating outside of the UK can still face prosecution, even if bribery — and the benefits of bribery activity — occurs wholly outside the country.
That said, it’s important to understand that an FCPA-compliant anti-bribery program will not necessarily cover adequate procedures under the UK Bribery Act. And while there are currently no anti-corruption laws or standards that span multiple countries, it is critical for companies operating globally to remember the need to comply with local regulations, regardless of where “home base” is. Global accountability is the essence of both Acts.
What Are the Risks and Costs of Corruption?
The cost of an environment of corruption and bribery in a company, community or country can be catastrophic to a corporation. Civil penalties and fines can be costly enforcement outcomes, and litigators continue to focus actions against the individuals involved in the corruption. It is also important to note that there is a growing trend for action against the officers and directors of corporations that fail to adequately oversee anti-corruption activities. In addition, criminal charges that can result in jail time are also becoming an important enforcement tool. And that doesn’t take into account the monetary cost incurred to comply with an investigation.
The damage done by a business environment of corruption extends well beyond the obvious, though. Corruption undermines the reputational standing of the people, communities and countries involved, and can result in a loss of faith in the systems and people entrusted to aid and assist the community. This mistrust goes beyond borders and can affect foreign standing and investment. Ultimately, civil and political stability could be compromised.
What Can You Do?
How can a multinational company ensure employees, customers and vendors understand both the importance of conducting business ethically and the company’s expectations of them? An effective anti-bribery/anti-corruption program is key.
When designing such a program, it’s important to understand the need for flexibility, especially when business crosses country and cultural lines. One size does not fit all. Adapting to the environment is important in establishing anti-bribery partnerships with your customers and vendors. And implementation of an anti-bribery program will mean nothing if there isn’t a commitment from the company’s upper management to abide by the program — talking the talk and walking the walk. If upper management sets the tone for compliance, the likelihood of success is greatly increased.
If upper management’s direction is a building block of a sound anti- bribery/anti-corruption program, a company’s code of conduct is the program’s foundation. The code is key to establishing fundamental processes that will provide direction to a company’s employees regarding the appropriate manner to manage unusual circumstances that arise. Training and communication of the code is critical, too. The decisions and actions of employees will no doubt set the tone for customers and vendors when it comes to willingness to act outside of the law.
The challenges companies may face when implementing a successful program include language barriers, cultural habits and decentralized monitoring and training, just to name a few. To resolve these issues, consider not only offering your code of conduct in local languages, but also involving local management and legal departments in the development and rollout.
What Success Looks Like
As part of AmerisourceBergen, World Courier is now part of a company with 14,000 associates globally. Our customers, suppliers and stockholders expect nothing less than integrity at all times. AmerisourceBergen’s code of conduct consists of two main components: the code of ethics & business conduct and the compliance policy on anti-bribery & anti-corruption (ABAC policy). In addition, the code references supplemental corporate policies on electronic communication, responding to government investigations, records and information management, instant messaging and email management/retention.
It is the responsibility of our associates, as well as vendors and agents operating on our behalf, to stay aware of the necessity of conducting all business transactions with the highest standards of integrity.
To learn more about implementing a global code of ethics and the AmerisourceBergen Code of Conduct, view our on-demand webinar.
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